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Statement by former Prime Minister Dr. Manmohan Singh on 2nd anniversary of demonetisation Notebandi unleashed havoc on the Indian economy

November 8, 2018, New Delhi

Today marks the second anniversary of the ill-fated and ill-thought demonetisation exercise that the Narendra Modi government undertook in 2016. The havoc that it unleashed on the Indian economy and society is now evident to everyone. Notebandi impacted every single person, regardless of age, gender, religion, occupation or creed.

It is often said that time is a great healer. But unfortunately, in the case of demonetisation, the scars and wounds of demonetisation are only getting more visible with time. Beyond the steep drop in headline GDP growth numbers after demonetisation, the deeper ramifications of notebandi are still unravelling. Small and medium businesses that are the cornerstone of India’s economy are yet to recover from the demonetisation shock. This has had a direct impact on employment as the economy continues to struggle to create enough new jobs for our youth. The financial markets are volatile as the liquidity crisis wrought by demonetisation is taking its eventual toll on infrastructure lenders and non-bank financial services firms. We are yet to understand and experience the full impact of the demonetisation exercise. With a depreciating currency and rising global oil prices, macro-economic headwinds are also starting to blow now.

It is therefore prudent to not resort to further unorthodox, short-term economic measures that can cause any more uncertainty in the economy and financial markets. I urge the government to restore certainty and visibility in economic policies. Today is a day to remember how economic misadventures can roil the nation for a long time and understand that economic policy making should be handled with thought and care.